The Vietnamese government this week said it will reduce import duties on a number of US-made products, including vehicles and liquid natural gas (LNG), as it looked to avert broad-based tariff hikes by the US. Vietnam imposes import duties of up to 70% on vehicle imports from countries with which it does not have a special trade agreement, such as those with other ASEAN countries.
The Vietnamese government is concerned that its significant bilateral trade surplus with the US, which exceeded US$123bn in 2024, makes it a target for US import tariff hikes. Most of the country’s exports to the US are electronic products such as smartphones, as well as machinery, garments and footwear.
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President Donald Trump announced this week the US will impose a 25% import duty on all vehicle and automotive components imported into the US from the 2nd April, setting off alarm bells in large exporting countries in Asia, particularly Japan and South Korea.
While Vietnam’s vehicle exports to the US have traditionally been very limited, the country’s domestic automaker Vinfast recently entered the US market. While it sold just a few thousand vehicles in the US last year, accounting for around 2%-3% of its global sales, imposing a 25% import tariff would clearly slow the company’s plans to establish a stronger foothold in the US market.
This week Vietnam’s Finance Ministry said it plans cut import duties on US-made vehicles to a maximum of 32%, while LNG duties will drop to 2% from 5%. Nguyen Quoc Hung, the head of the Finance Ministry’s tax policy department, confirmed the tariff cuts are aimed at “improving trade balances with Vietnam’s trade partners,” adding that a decree on the tariffs cuts will be ready “within this month and will take effect immediately.”
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